Switzerland pocketed Sfr1.2bn (€792m) as it sold its investment in UBS, making it the first government in Europe to declare that a major crisis-hit bank was fit enough to have state ownership withdrawn.

The move comes less than a year after Switzerland pumped Sfr6bn into the lender as part of a rescue package. UBS was one of the worst-hit banks during the crisis and has written down about $50bn in the value of so-called toxic assets.

On Thursday, Switzerland converted a note that gave it a 9.3% UBS stake and immediately sold the 332.2 million shares at 16.50 francs each, a 1.4% discount to the stock's closing price on Wednesday. The government said it earned an annualised return of 30% on the 10-month investment.

"This stabilisation program is notable as it is the first program thus far to clearly demonstrate that it has generated attractive returns for the capital that was invested by tax payers," said Marco Illy, Credit Suisse's Swiss investment bank head. Credit Suisse, which advised the government on how to exit from UBS, was in charge of the sale alongside UBS and Morgan Stanley.

Governments across Europe, including the UK, Germany, the Netherlands and Belgium, were forced to take part or full ownership of major banks that were threatened with collapse at the peak of the financial crisis. Most still have those holdings.

The UBS offering, which came one day after Switzerland and the US formally settled a tax spat with UBS at the centre, was well received by investors. Shares were placed with institutional investors in the US, the UK, Switzerland and elsewhere in Europe.

A second leg of the UBS rescue package was the outsourcing of remaining toxic assets to a fund managed by the Swiss National Bank. This fund continues to be managed by the central bank.

The Swiss government -- which made the decision to sell the shares together with the central bank and financial regulators -- was eager to free itself from the UBS stake, provided the bank was stable enough to begin restoring itself alone.

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The government said Wednesday that the US tax deal and UBS's strong capital have worked toward restoring trust in the bank, meaning the government's goals have been fulfilled.

"The transaction meets the government's two principal objectives, which were to secure proceeds which represent an adequate return for the taxpayer and to engineer an appropriate exit once the government, in conjunction with the SNB and Finma, were of the conviction that UBS has been stabilised," Credit Suisse's Illy said.

UBS declined to comment on the placement Thursday. Late on Wednesday, Kaspar Villiger, UBS's chairman and a former Swiss finance minister, said the exit is an acknowledgement of the bank's restorative measures so far. Villiger also thanked the government, the SNB and the Swiss Financial Market Supervisory Authority, or Finma, for their "prudent and resolute course of action" from October through Thursday.